FilmOn gets injunction; Ivi toes “secondary transmission” line

The big four networks have won a temporary injunction against streaming …

In the ongoing struggle between broadcasters and online streaming services, Big Content has earned a temporary win against streaming service FilmOn. A federal judge has ordered FilmOn to cease streaming content from live, over-the-air broadcasts at least until it submits a satisfactory legal brief explaining why the court shouldn't grant the preliminary injunction sought by the four largest US broadcast networks.

Meanwhile, competitor Ivi—accused of the same copyright violations as FilmOn in a separate lawsuit—is wrestling with a contradictory legal framework to show that it is a legitimate business operating under the letter of copyright law. At stake is whether or not online streaming services should have the same benefits as satellite and cable—and more recently, FIOS and U-verse IP-based TV—since broadcasters are obligated by the FCC to negotiate retransmission contracts.

FilmOn was sued in US District Court in the Southern District of New York in early October by ABC, CBS, Fox, and NBC, alleging that its re-transmission of the networks' OTA broadcasts constituted copyright infringement. As we noted Monday, Judge Naomi Buchwald considered the networks' request for a preliminary injunction against FilmOn to cease retransmission of OTA broadcasts.

In her order, Buchwald chastised FilmOn's counsel for essentially copying his reply to the injunction request from another lawyer working on a similar case in a different jurisdiction. The judge offered counsel until December 6 to draft a brief that's acceptable according to the court's rules, but slapped FilmOn with a temporary restraining order until the injunction can be considered in full in late December or early next year.

While the restraining order is a loss for both FilmOn and its customers, competitor Ivi—itself facing a similar lawsuit and request for a preliminary injunction filed in late September—applauded the move. Spokesperson Hal Bringman told Ars that his company did not want to be associated with FilmOn, despite the seeming similarities between the two companies and the lawsuits against them. "Ivi welcomes the opportunity to distinguish itself from a 'bad actor' who was not operating in good faith by blatantly violating copyright law," he said.

The company notes that Judge Buchwald dismissed an earlier motion by FilmOn to have the two lawsuits combined, ruling them "unrelated."

The fact that both companies are being considered separately is an important one for Ivi, which has made every attempt to work within the legal framework offered by Section 111 of the US Copyright Act that allows for secondary transmission of OTA broadcasts by paying a statutory license to the Copyright Office. Entities which do so must also adhere to the same rules about geographic distribution and content protection that cable and satellite systems do, and Ivi contends that it has followed those stipulations.

"The Court's ruling gives us faith in the judicial system to effectively separate those operating in good faith abiding by every letter of the law, and those like FilmOn who publicly brag about being 'cavalier' towards copyright law," Ivi co-founder and CEO Todd Weaver said in a statement. "FilmOn doesn't fit the copyright definition of a cable system, distributes content outside the US in an unprotected format, and offers its service free of charge, which is a clear violation of all applicable copyright law."

Ivi, in contrast, only retransmits signals to its ivi.TV Player software. It encrypts the video streams to prevent unauthorized access, restricts access to the US (per copyright and free trade agreements), and charges subscribers a fee for access, upon which the periodic fees for statutory licensing are based. Ivi likens its service to AT&T's U-verse or Verizon's FIOS TV, which offer multichannel video over IP-based networks.

"The Copyright Office has taken the position that AT&T's IP-based technology is subject to the license," Bringman explained. "If the license is available to AT&T, there is no logical reason why it shouldn't be available to ivi TV as well."

Unfortunately for Ivi, the legal precedents aren't so clear cut. The Copyright Office itself has made contradictory recommendations about Internet-based retransmission. In its 2008 Satellite Home Viewer Extension and Reauthorization Act section 109 report, the Register of Copyrights Marybeth Peters wrote:

The principal finding here is that new systems that are substantially similar to those systems [i.e. cable and satellite] that already use Section 111, should be subject to the license. Thus, systems that use Internet protocol to deliver video programming, but are the same in every other respect to traditional cable operators, should be eligible to use Section 111 to retransmit broadcast signals, provided that these systems abide the same broadcast signal carriage statutory provisions and FCC exclusivity requirements applicable to cable operators.

That seems to support Ivi's position that it qualifies for Section 111 statutory licensing. However, the very next paragraph states:

Several businesses are using, or plan to use, the Internet to retransmit broadcast programming. The Office recommends that businesses using the Internet to deliver video programming should not be eligible for a statutory license at least at this time.

The fact that Ivi is using its own media player software may be the deciding factor that separates it from other online streaming services that retransmit OTA broadcasts—the company says its software effectively serves a "virtual set-top box." However, Ivi also faces another regulatory hurdle: the FCC doesn't offer a specific categorization for Ivi's service like it does for cable or satellite providers.

The FCC mandates that broadcasters and rights holders must negotiate licenses with cable and satellite TV providers, and the FCC can step in and provide assistance with those negotiations. However, while Ivi may qualify for a Section 111 statutory license, it doesn't currently qualify for assistance from the FCC in negotiating retransmission contracts because it doesn't fall under one of the FCC's current service categories. Without help from the FCC, according to Bringman, "Big Media uniformly denied Ivi access to its content."

That led Ivi to file its own lawsuit against the networks claiming copyright infringement, asking for a declaratory judgement that it does not violate copyright based on its adherence to Section 111 rules. That lawsuit is currently pending in the Wester District of Washington, and Ivi is seeking to get the suit against it in New York moved to that venue. Unless the Copyright Office makes a legally binding "final rule" on Internet-based streaming services, the FCC defines a clear category that qualifies Ivi for its assistance, or Congress steps in and makes a Copyright Act amendment (as it did for satellite in the 80s), then for now it will be a matter for the courts to decide.

So while Big Content and legal hurdles stymie efforts from companies like Ivi to offer viewers what they are increasingly demanding—access to content when and where it is most convenient—TV networks continue to frustrate customers by blocking their own online offerings from being viewed on a TV screen.

I'm with ylandrin. I don't understand why the networks can't just offer their media in the simplest form for me to consume (i.e. Everywhere and for less than a small fortune.) otherwise, piracy Just Works.

So basically one company is playing by the existing rules while the other isn't. Guess which one stands a better chance of success? With that being said this court case is only one hurdle. There's still the negotiations to deal with.

I'm with ylandrin. I don't understand why the networks can't just offer their media in the simplest form for me to consume (i.e. Everywhere and for less than a small fortune.) otherwise, piracy Just Works.

advertisement, thats what pays for the content and keeps affiliates afloat.

advertisement, thats what pays for the content and keeps affiliates afloat.

How is that related? Ivi was retransmitting programs including their original advertisement, which is exactly what the cable companies do. And brings in revenue for the networks, who pay for the content. No difference there, except the ease of access for customers.

Instead, cutting that source will push back customers (who, remember, were paying for that service with ads) to the next easiest thing: file sharing. Thereby cutting revenue for the whole ecosystem.

advertisement, thats what pays for the content and keeps affiliates afloat.

How is that related? Ivi was retransmitting programs including their original advertisement, which is exactly what the cable companies do. And brings in revenue for the networks, who pay for the content. No difference there, except the ease of access for customers.

Instead, cutting that source will push back customers (who, remember, were paying for that service with ads) to the next easiest thing: file sharing. Thereby cutting revenue for the whole ecosystem.

example.so you are business person and start an NBC affiliate station. you pay your fees to show NBC content.mix in some local advertisement as well. NBC has promised you that there will not be another competing NBC station serving the same area. thus they make a business.

FilmOn comes along and says, "meh, i'll do the same just not pay for it."

so you are business person and start an NBC affiliate station. you pay your fees to show NBC content.mix in some local advertisement as well. NBC has promised you that there will not be another competing NBC station serving the same area. thus they make a business.

Yes. That is what the cable companies do too. With the blessing of the FCC, and the networks.

Killing Time wrote:

FilmOn comes along and says, "meh, i'll do the same just not pay for it."

The networks continue to fight the inevitable while solutions are made to make watching existing content easier. They'll rue the days they fought these services instead of working alongside them. As technology progresses the old guard content owners will compete with new content creators on the Internet who won't have these wall gardens mentality.

advertisement, thats what pays for the content and keeps affiliates afloat.

How is that related? Ivi was retransmitting programs including their original advertisement, which is exactly what the cable companies do. And brings in revenue for the networks, who pay for the content. No difference there, except the ease of access for customers.

Instead, cutting that source will push back customers (who, remember, were paying for that service with ads) to the next easiest thing: file sharing. Thereby cutting revenue for the whole ecosystem.

In fact, by allowing companies to stream these shows they increase the viewing audience for these advertisements. I do not watch television over the air or by cable, my viewing is done through Netflix or Hulu. If companies were to allow Internet-based streaming services on the same day of broadcast I'd be happy to watch.

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

If the networks had a clue they would switch over to free streaming and ep downloads as fast as they can. Driving people to their site thus expanding ad revue would would build them a much better setup than what they are doing now DRM>region>sub region>user/potential buyer.

TV lost me when A&E became a crappy reality TV network and I have not looked back if its not through the web I could care less... tho I do like my local talk radio(102.3 FM, in chattnooga TN) its derisive and entertaining enough, more so than 90% of whats on TV and I can not be bothered to find the 10% of the good stuff so its the net or what I have recorded on my PC.

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

Copyright boils down to distribution of works, if you are not licensed for it they cans top you, its as simple as that.

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

Copyright boils down to distribution of works, if you are not licensed for it they cans top you, its as simple as that.

Which is why copyright needs to change and these companies need to be told "If you allow it to be broadcasted for free AT ALL, anyone can rebroadcast it for free. Period, done with, argument finished!"

If the networks had a clue they would switch over to free streaming and ep downloads as fast as they can. Driving people to their site thus expanding ad revue would would build them a much better setup than what they are doing now DRM>region>sub region>user/potential buyer.

TV lost me when A&E became a crappy reality TV network and I have not looked back if its not through the web I could care less... tho I do like my local talk radio(102.3 FM, in chattnooga TN) its derisive and entertaining enough, more so than 90% of whats on TV and I can not be bothered to find the 10% of the good stuff so its the net or what I have recorded on my PC.

They wouldn't be "smart" to switch to free episode downloading. Content creators would never agree to that because it would damage sales of season DVD collections.

However, as I've mentioned before, the OTA networks should be encouraging online simulcasts (we already know how they feel about time-shifting so let's cross that bridge later) of non-sports content. Sports content is another tricky area because the NFL wants to sell more Sunday Ticket packages and the NHL wants to sell more Center Ice subscriptions. So, like with "free episode downloads," you have an unwilling content creator.

IANAL but the easiest way to encourage this is for the FCC to step in, as the article states, and layout rules for rebroadcast. If the FCC is unwilling, maybe Congress can get over their bickering for a few minutes to step in instead. It seems to me that the FCC laying down a fairly rigid set of rules allowing companies such as Ivi to rebroadcast (probably requiring the stream to be within a few minutes of original broadcast timing) would effectively force the OTA networks to jump into the rebroadcast market.

I was also about to ask why can't I get my OTA local channels for free OTI (Over the Internet). I live in a spot that's a hole in RF transmissions, I get one channel's subcarriers, and none of those are in English. Why can't I get my Fox, CBS, etc that's only about 25-30 miles away for free over the Internet?

I also wish I would have known about FilmOn before, I totally would have used it. Since Ivi charges, I'll skip that one.

I'm stuck with crappy 2nd streams from channelsurfing.net, and I hope that's hosted and run outside of the US, because otherwise, it's just a matter of time before it gets shut down.

If the networks had a clue they would switch over to free streaming and ep downloads as fast as they can. Driving people to their site thus expanding ad revue would would build them a much better setup than what they are doing now DRM>region>sub region>user/potential buyer.

TV lost me when A&E became a crappy reality TV network and I have not looked back if its not through the web I could care less... tho I do like my local talk radio(102.3 FM, in chattnooga TN) its derisive and entertaining enough, more so than 90% of whats on TV and I can not be bothered to find the 10% of the good stuff so its the net or what I have recorded on my PC.

They wouldn't be "smart" to switch to free episode downloading. Content creators would never agree to that because it would damage sales of season DVD collections.

However, as I've mentioned before, the OTA networks should be encouraging online simulcasts (we already know how they feel about time-shifting so let's cross that bridge later) of non-sports content. Sports content is another tricky area because the NFL wants to sell more Sunday Ticket packages and the NHL wants to sell more Center Ice subscriptions. So, like with "free episode downloads," you have an unwilling content creator.

IANAL but the easiest way to encourage this is for the FCC to step in, as the article states, and layout rules for rebroadcast. If the FCC is unwilling, maybe Congress can get over their bickering for a few minutes to step in instead. It seems to me that the FCC laying down a fairly rigid set of rules allowing companies such as Ivi to rebroadcast (probably requiring the stream to be within a few minutes of original broadcast timing) would effectively force the OTA networks to jump into the rebroadcast market.

MMmmmmmmm WHat I meant was simulcasts and streaming eps(pop shows with commercials) that can be downloaded(only of current shows and in lower qaulity than if you had a subscription, IE you get basic high qaulity, and can get ultra high qaulity buy buying the ep for2$). And their subscription should never go over 5$ a month.

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

Copyright boils down to distribution of works, if you are not licensed for it they cans top you, its as simple as that.

Which is why copyright needs to change and these companies need to be told "If you allow it to be broadcasted for free AT ALL, anyone can rebroadcast it for free. Period, done with, argument finished!"

It dose not quite work like that, what copy right needs to understand is that distribution can be done without profit or attempts to make money from copy righted items.

So instead of saying you can't do X or Y without a license it becomes you can not do X or Y and attempt to make a profit without a license.

Chris interesting analysis. ivi has a difficult road but they are making some good arguments and wisely attempting to separate themselves from Filmon.com I just did a post here talking about the issues and attaching a few additional documents your readers may find of interest. See http://www.ipinbrief.com/is-ivi-an-inte ... innovator/

It dose not quite work like that, what copy right needs to understand is that distribution can be done without profit or attempts to make money from copy righted items.

So instead of saying you can't do X or Y without a license it becomes you can not do X or Y and attempt to make a profit without a license.

That's assuming the sole purpose for copyright is profit.

For the most part it is, without greed we would have never had a need for it. While the original design of copy right was to grant creators certain rights its devolved into a system where the middle man builds an empire on what they can steal,bully or low bid from the creator. Also you can not have significant dissemination or "profit loss" without being able to make money off it. Look at the vast majority of current file sharing most of it runs on profit attempting basis thus doing direct harm to the license owners.Profitability=usability=interest=worthwhile, all of these are the same if its not interesting or usable then its not worthwhile if its not worthwhile its not worth anything and you have no real drive to protect/copy right/IP it.

First we must amend copy right to allow distribution and copying in non profit attempting environment(I say non attempting because non profit is much too vague).

Then it must be amended to allow the circumvention of hardware ad software protections stopping at servers the person in question dose not own. Then ownership of copy righted items that have been gain through such means is legal and fair use in today's world.

Basically we turn the clock on copy right issues back to the early 90s.This will make copying is a non issue, downloading/distrobusion a non issue, sharing a non issue, lending is a none issue, modchips are a non issue, circumvention is a non issue.

The only thing that is a issue is distribution with the intent to make unlicensed profit, this can be done by saying whole copyrighted items and parts of whole copy righted items may not be distributed any means that attempts to make a unlicensed money(direct sale, donations,ads but not web hosting as that comes out of pocket of the person who wants to share). Be it links,donations or emails anything that dose not pass today's fair use scrutiny is invalid and must gain a license to remain in operation.

Sure its still enslavement and almost neo fascist but thats main due to copy right and the Constitution in general being raped, ignored and rewired for random groups who hold vast power and money, but IMO distribution is the key to jeep the public mostly safe from abuse from above, if we can buy or get a free no ad web space then we should be allowed to share and trade any thoughts,ideas,pictures,sound,ect,ect up to whatever the agreement is of the web space(you hit X bandwidth you can't share files until the next month).

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

Copyright boils down to distribution of works, if you are not licensed for it they cans top you, its as simple as that.

Which is why copyright needs to change and these companies need to be told "If you allow it to be broadcasted for free AT ALL, anyone can rebroadcast it for free. Period, done with, argument finished!"

It dose not quite work like that, what copy right needs to understand is that distribution can be done without profit or attempts to make money from copy righted items.

So instead of saying you can't do X or Y without a license it becomes you can not do X or Y and attempt to make a profit without a license.

I am well aware of copyright, but if you are going to blast your content over unsecured channels (ala open air), you have essentially blasted into the public domain (in terms of rebroadcasting). I view it similarly to running an unsecured wifi, if leechers get on it - it's not the leechers fault, secure your channels or stfu.

Also, does transmitting an over the air broadcast, verbatim, constitute a broadcast in the first place? You are not really broadcasting, since it is no longer a frequency based transmission, nor are you broadcasting in the sense of IP/TCP. What you are doing is enhancing the broadcast, but TV stations need to get a grip, you can't put something out for free, and expect people not to fiddle with it.

What I don't get, is why over the air "free tv" can't legally be streamed verbatim. The streams have the exact content I would see if I were sitting on my couch, and it's done live, so the time of day is even the say. But rather than offering these streams legally, they are treated like some black art.... wtf? The streamers are actually running at a loss (since they have to provide the bandwidth and CPU cycles).

Copyright boils down to distribution of works, if you are not licensed for it they cans top you, its as simple as that.

Which is why copyright needs to change and these companies need to be told "If you allow it to be broadcasted for free AT ALL, anyone can rebroadcast it for free. Period, done with, argument finished!"

It dose not quite work like that, what copy right needs to understand is that distribution can be done without profit or attempts to make money from copy righted items.

So instead of saying you can't do X or Y without a license it becomes you can not do X or Y and attempt to make a profit without a license.

I am well aware of copyright, but if you are going to blast your content over unsecured channels (ala open air), you have essentially blasted into the public domain (in terms of rebroadcasting). I view it similarly to running an unsecured wifi, if leechers get on it - it's not the leechers fault, secure your channels or stfu.

Also, does transmitting an over the air broadcast, verbatim, constitute a broadcast in the first place? You are not really broadcasting, since it is no longer a frequency based transmission, nor are you broadcasting in the sense of IP/TCP. What you are doing is enhancing the broadcast, but TV stations need to get a grip, you can't put something out for free, and expect people not to fiddle with it.

True but precedent has set distribution as how the copy righted item is accessed, the FCC ensures only licensed broadcast can take place and over IP/TCP the lawyers ensure any large er.. reboardcaster will be sued out of existence.

So again it goes back to copy right 101 and how the courts have leaned on the matter. IMO no license means your right to send any information is heavily limited.

Congrats on a well-researched and informative article on a complicated matter. As a lawyer who has been following the case closely, I can't help but give my two cents as well.

"Big Content", (love that term, by the way!) cite the iCraveTV and the VuiVision cases as precedential. Because neither case was ever decided on the merits by a judge, they have no meaningful precedential value. iCraveTV was enjoined by a TRO and the parties settled afterward. VuiVision entered a consent judgment and then settled. As a side matter, iCraveTV did not contend that it was entitled to the “compulsory license”, it claimed protection under a separate copyright provision, the "passive carrier exemption." iCraveTV did not qualify for the compulsory license, because it transmitted broadcast content free of charge. Just like FilmOn.com.

ivi, Inc. has actual case precedents on its side. Cable companies retransmitted broadcast television without network permission and won two landmark Supreme Court victories in Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968), and Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S. 390 (1968), which held that retransmission of broadcast television was not copyright infringement.

These cases gave rise to the enactment of the Section 111 compulsory license. Thus, the cable television industry was born.

Then, in 1991, satellite companies prevailed over the networks in Nat’l Broad. Co., Inc. v. Satellite Broad. Networks, Inc., 940 F.2d 1467 (11th Cir. 1991), where the Eleventh Circuit held that satellite television company fit under the definition of a “cable system” because it retransmitted broadcast television to “subscribing members of the public who paid for such service.”

This case was later overruled after the Copyright Office issued a “final rule”, but this was only after the satellite industry received its own specific compulsory license, in Section 119 of the Copyright Act.

Those cases not only support ivi, Inc.’s reading of the definition of “cable system”, but they also show that, historically, companies with new television delivery technologies unfortunately have to fight their right to innovate in the courts. It’s not an ideal situation, but it’s the way the system has worked historically.

You're correct that the Copyright Office's statements are somewhat contradictory. But there is guidance there.

The Copyright Office is certainly concerned about internet streaming, and rightfully so, given the existence of Internet piracy. As you quote above, the Office states in its 2009 report, at page 181 that:

“The principal finding here is that new systems that are substantially similar to those systems that already use Section 111, should be subject to the license. Thus, systems that use Internet protocol to deliver video programming, but are the same in every other respect to traditional cable operators, should be eligible to use Section 111 to retransmit broadcast signals.”

As you point out above again, the Report further states that AT&T’s Internet Protocol television delivery technology, U-verse (as well as Verizon’s FIOS television system) should be considered are “cable systems”, at page 199, as follows:

“By its terms, the statutory license applies only to cable systems and Section 111(f) defines “cable system” quite broadly. Consequently, both AT&T, as well as Verizon, meet each of the elements of the cable system definition.”

It is my understanding from following the ivi, Inc., case that ivi’s television delivery system is the functional equivalent of AT&T’s U-Verse technology. The only difference is that ivi uses its player as a “virtual set-top box” instead of the actual hardware receiver box that AT&T’s U-Verse customers use.

If my understanding of the facts is correct, then it would appear that ivi, Inc. actually has the Copyright Office’s interpretation of “cable system” on its side, since its service is analogous to AT&T’s.

Consumers do want television on the Internet, but it is important that Internet television be delivered in a secure manner that ensures that copyright holders can be fairly compensated. From my vantage point, it appears that ivi, Inc. has developed a system that will accomplish both those ends.